Time and Patience
President Obama is the choice of majority of Americans to lead the nation out of the world’s biggest financial crisis. What we see today is basically like the great depression in the 1930s. Obama, being the first African-American president, became the source of hope and confidence who will lead his people out of crisis.
So far, with months of financial crisis, things are just getting worse. Bloomberg’s news survey projects America’s unemployment rate will reach 9.4 percent this year. Citibank, once the world’s largest bank, now has a share price that is worth a can of Coke. Everything seems to be falling apart.
Even US Billionaire Warren Buffett has lost over 50 billion. In his own words, he mentioned that the American economy has “fallen off a cliff” and will take years to solve. Despite the stimulus package being approved, markets do not believe that it will be enough to solve problems. In fact, the stimulus package lacks the focus. It is almost like shooting money all over the place in order to give a bit of help here and there.
I have said that this market is ‘on its way down’. In fact, most of the private bankers did not believe my call early last year that things are going to get worse. Many of them were in a denial stage that things will eventually get better. They did not realize that the problem is so huge. A lot of family wealth has been destroyed because of lack of proper guidance. So far, the Philippines is still spared, except for the export sector. This sector’s market is basically America, and the countries supplying America.
So what has Obama done in his first 50 days in office? America’s problems are beyond what even superman can do at these times. Obama is no superman. He is the first African-American president who continues to bring hope. But, aside from hope, time is needed to solve America’s problem. It may even take a long time. With so many decades of consumer lending and very friendly credit terms pushing consumers to spend beyond their means, all these brought down the savings of every American. Changing them to a saving and conserving society will take time. As a result of credit getting tighter, people are trying to save for a rainy day, which is actually now a stormy day. This has brought further the erosion on the velocity of consumer spending. Consumer spending will surely go back to the basic necessities in life. It is affecting the whole world.
All throughout the years, was the growth in America for real? Today, Japan announced a record account deficit in 13 years. The country stated a huge deficit of almost two billion dollars in its current account, with a huge GDP contraction of 12%. Its stock market reached its highest of 45 T level 15 years ago. Now, it is down to its present 7t level. All countries that relied on America for their growth are also now in trouble. Most American consumers are facing great difficulties. We will soon see the stock market at the levels of 5t, but along the way there will be bear market rallies. Ultimately, the markets will reflect the true state of the American economy.
The financial institutions will have to move on from extreme greed that has lasted for many years to extreme fear. One needs a lot of time to properly balance these. Lending will never be the same again. This will force a contraction in consumer spending. For how long? It is hard to say. You cannot force Americans to spend and take the lead as the largest consuming country in the world. Even with the entire massive stimulus given to consumers, this has brought them the fear that is needed to correct the problem. We only change as a people when we are faced with challenges in life. We change like the way we take risks. America will never be the same.
Nations in the past, like the Roman Empire, Spain, Greece, among others, were once the superpowers of the world. In time, new superpower nations emerge. Which nation will be the next to replace America? Will it be Euro-land or China? It is hard to say. I believe Euro-land will be the next superpower, especially if UK and the former Russian Republics will join them. It is hard to believe in that possibility, but looking back at history, every empire has its time. Even with this, America will still play an important influence in the world. However, I also feel that even its currency will soon lose its role as the world’s trading currency. This will not happen overnight. It will take many years. Japan was dominant with brands and technology. The country has now been overtaken by Korea and China. How will the Philippines be 10 years from today? I believe that we will be the most dominant force in outsourcing, which includes export of manpower services.
Let me share with you some of the positive feedback we have been receiving from supporters of Go Negosyo.
“I am lucky to have a business that caters to small entrepreneurs. I say, lucky, because I am exposed to very positive & upbeat individuals who believe that we can ride through this global crisis. In fact, many of us view this as a window for better opportunities. May God continue to bless your group so you may carry on to inspire Filipinos to become great entrepreneurs.”
“Sir, I am one of the thousand of participants during the forum for women at WTC. I am a govt. employee, staff of Gov. Padaca, i was amazed and inspired by the spirit and enthusiasms shown by the women during the convention. Topics are relevant and timely. I brought home with me so many insights and learnings but not to forget that it was during that forum that burning heart of entrepreneurship relives in me. God Bless you and Continue your advocacy and touched the lives and heart of people.”
“I was very impresse4d with the way Go Negosyocelebrated the women month. All possibilities for women to grow personally , socially and economically were covered. Yes the Filipino can and the new battle cry the Pinay can”
“I’m working student and hopefully to finish my studies this year 2009.I’m glad to watch your T.V shows during sat. and sun. at T.V Q.Continue your good service. My dear classmate are plan to join franchise business,but its be made this coming summer month.Sana maging successfull kami!!!More Power!:)”